Resolutions issued by a water management company; the determination of the invalidity of such a resolution SK 49/13

‘The provisions of Article 179(2) and (4) of the Water Management Act – read in conjunction with procedural provisions which specify the jurisdiction of common and administrative courts, but, above all, interpreted in conformity to constitutional provisions, especially Article 177 of the Constitution – do not bar recourse to a court on the part of the members of a water management company in cases concerning their rights, including property rights,’ stated the Constitutional Tribunal.

On 12 May 2017 at 9 a.m., the Constitutional Tribunal considered a constitutional complaint submitted by Falubaz Polska S.A. S.K.A., a company with its registered office in Zielona Góra in Poland, with regard to resolutions issued by water management companies (the determination of the invalidity of such a resolution).

The Constitutional Tribunal adjudicated that Article 179(2) and (4) of the Water Management Act of 18 July 2001 is consistent with Article 45(1) in conjunction with Article 77(2) of the Constitution.

Moreover, the Tribunal decided to discontinue the proceedings as to the remainder.

The ruling was unanimous.

Article 179 of the Water Management Act regulates one of the measures available to the governor of a poviat as regards supervision over water management companies, namely it provides for the competence of the said governor to determine the invalidity of resolutions issued by the officials of such companies.

The company filing the complaint, which is a member of a water management company, challenged the aforementioned provisions, relying on the assumption that – by vesting the governor of a poviat with the power to determine the invalidity of a resolution issued by a water management company – the legislator had ruled out the possibility of challenging the resolutions before a common court.

Having analysed the wording of the challenged provisions and the practice of the application thereof, as well as while comparing the supervisory measures provided for in those provisions with a similarly construed measure specified in statutes concerning local self-government,

The Constitutional Tribunal concluded that the provisions of Article 179(2) and (4) of the Water Management Act – read in conjunction with procedural provisions which specify the jurisdiction of common and administrative courts, but, above all, interpreted in conformity to constitutional provisions, especially Article 177 of the Constitution – do not bar recourse to a court on the part of the members of a water management company in cases concerning their rights, including property rights.

The Tribunal pointed out that, in practice, there had been an increase in the number of rulings, and in particular the rulings of the Supreme Court, in which it was stated that common courts were competent in a given case to examine the validity of resolutions issued by the officials of water management companies.

The Tribunal indicated, in particular, two determinations of the Supreme Court, namely the decisions of 4 June 2014 (ref. no. II CSK 453/13) and of 22 October 2014 (ref. no. II CSK 13/14). In those decisions, making reference to its previous stance about the civil-law character of membership in a water management company, the Supreme Court confirmed the admissibility of a judicial review as regards determining the validity of resolutions displaying characteristics of juridical acts, issued by the officials of such a company.

In the Tribunal’s opinion, when presenting an interpretation consistent with the Constitution with regard to provisions delineating the scope of the jurisdiction of a court in cases concerning the resolutions of water management companies, where the resolutions constitute juridical acts or have civil-law effects, one may not overlook the fact that – unlike statutes on the units of local self-government – the Water Management Act does not vest a supervisory authority (or any other entity) with the power to appeal against resolutions issued by the officials of water management companies in a competent administrative court in situations where the supervisory authority does not determine the invalidity of the resolutions within the time-limit set in Article 179(2) of the Water Management Act.

The Tribunal noted that the legislator had not provided for such a solution in the Water Management Act, most likely taking into account the fact that water management companies are not entities falling within the category of public administration, whereas administrative courts exercise control over the activity of public administration.

The Tribunal indicated that, while considering their scope of jurisdiction in cases pertaining to the resolutions of water management companies, common courts should also take account of that circumstance, whenever a given case has the character of a civil case.

As to civil-law relationships to which a water management company is a party, a review by an administrative court and the jurisdiction of a common court may not be treated as mutually exclusive; on the contrary, they are complementary.

The Tribunal stressed that, when determining the outcome of the interpretation of Article 179(2) and (4) of the Water Management Act as well as of procedural provisions delineating the scope of the jurisdiction of common and administrative courts, one should take account of the constitutional standards of the right to a fair trial.

This means that in the case of numerous provisions regulating the jurisdiction of courts with regard to cases of a certain category, a solution to such concurrence of provisions may not lead to a situation where, in the context of any cases, there would be no recourse to a court within the meaning of Article 45(1) of the Constitution.

The Tribunal added that the fact that water management companies perform tasks related to the protection of a public interest justifies extending the scope of the state’s supervision to include the said companies.

However, in a situation where such companies still remain private entities, this does not justify such an interpretation of Article 179(2) and (4) of the Water Management Act and of statutory provisions delineating the scope of the jurisdiction of administrative and common courts which would – in the case of civil-law disputes – exclude the access of the members of water management companies to any courts.

When considering the present case, the Tribunal noted numerous problems in the practice of applying Article 179 of the Water Management Act, which had also been noted in the doctrine. Although, as held by the Tribunal, the binding provisions of the Water Management Act, interpreted systemically, make it possible to arrive at an outcome that would be consistent with the Constitution, the legislator should still consider a more precise way of regulating matters related to the distinction between the scope of the jurisdiction of administrative and common courts within the realm related to the activity of water management companies, which are private entities that actually carry out public tasks.

The Constitutional Tribunal stressed that if the legislator is to specify the right to a fair trial then he should do so particularly precisely, especially as regards any restrictions of that right.

Thus, the legislator should – in a way that leaves no doubt – specify by what legal means the individual is to realise his/her right to a fair trial and what is the scope of the jurisdiction of a competent court.

The hearing was presided over by Judge Grzegorz Jędrejek, and the Judge Rapporteur was Judge Sławomira Wronkowska-Jaśkiewicz.